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ACCT11081 – Introductory Financial AccountingAssessmentBy Kayla WalkomID: 12107764Campus: DistanceLecturer: Maria TylerStep 1: KCQ’s Chapter 1 Sections 1.1 - 1.3After completing ACCT11059 in Semester 1, I am unsure of what this unit will involve as I first thought the unit I completed in Semester 1 was the introduction to accounting. I enjoyed that unit quite a lot as the support system was great and I got into contact with people who I am still talking to now at the end of the year. I am interested to see where this unit leads me, and I am keen to learn new things within this unitThis chapter was mostly a summary of what was spoken about in the unit ACCT11059. However, in this chapter the author has added additional information about each of the elements and concepts that are spoken about. What I liked about this chapter was the fact that some clear-cut definitions of the five key elements were included from the AASB CF framework. For my memory’s sake, I have listed these:“Assets are a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity”“Liabilities are a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits”“Equity is the residual interest in the assets of the entity after deducting all its liabilities”“Revenue is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in an increase in equity, other than those relating to contributions from equity participants arising in the course of an entity’s ordinary activities”“Expenses are decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants”I also refreshed my memory on the two accounting equations. The fundamental accounting equation:Equity = assets – liabilitiesAssets = equity + liabilitiesExtended accounting equation:Assets = equity + (revenue – expenses) + liabilitiesAssets + expenses = equity + revenue + liabilitiesIt was helpful to refresh my memory on the five key elements of accounting, the two blocks of bookkeeping (journals and ledgers) and overall what double entry accounting really is. One thing I remember not fully understanding when I did ACCT11059 is what are debits and what are credits. I now know that the left-hand side of the equation is debits and the right-hand side is the credits. If I remember the equation, I will easily be able to know the debits and credits.I like the use of analogies and other examples in the real world as these help me to understand what is being explained within the readings. I quite liked the information about buttons on shirts. Women have buttons on the left and men on the right. This is because many years ago, women would get dressed by a maid, so the buttons were on the left as it was easier for maids that way. Men always dressed themselves so having them on the right made it easier for them, this was done as there were more right-handed people than left. The side that buttons are on has not changed in recent times as it is what everyone is used to now so why change that? This piece of information related to double entry bookkeeping. Although it might be a lengthy process, it is what people are used to. In today’s world however, it is common for computers to do most of the work for us which reduces the amount of work that people have to do when it comes to this process.Overall, I am feeling confident that I am remembering and learning new things within this unit that tied together with the previous unit ACCT11059. I now have a better understanding of the five key elements of accounting: assets, liabilities, revenue, expenses and equity, and the short definitions of these I listed above. I refreshed my memory on the building blocks of bookkeeping: journals and ledgers. Lastly, I also looked at the equations, and debits and credits, and have a better understanding on what debits are and what credits are within the equation and how these are used in a ledger to show whether a balance is seen in the trial balance. I look forward to reading more over the next few weeks and trying to understand new concepts in my own way.Step 2: KCQs Chapter 1 + 2 Sections 1.4 + 2I liked reading 1.4 as it was about the main things that should be memorised. When it comes to remembering things, I am not good at it. I will on many occasions forget where I put my wallet or car keys and end up trying to find them for the next 5-10 minutes. The three things mentioned we should try to memorise are:An increase in an asset is a debitAssets + expenses = equity + revenue + liabilitiesThe left-hand side of the equation is debits and the right hand side is creditsAfter I read these three things, I noticed they all tie together. I know what debits and credits are, how increases or decreases to one accounting element will affect the debits and credits, and lastly knowing what elements are debits and credits.I have a pretty good understanding of this and know that if I remember the equation, I will know where the debits and credits are.In chapter 2, it looked more carefully at journals and ledgers. I learnt more about subsidiary ledgers and how they are ledgers that contain more detail to the general ledger.There was then more information about the types of journals as well. Specialised journals will often contain information that a general journal will not. There are different types of journals such as sales journals, purchase journals, cash receipts journals and cash payments journals. In this chapter I liked that the author included visual aids to help understand the use of journals and ledgers and how companies will actually use them in their operations. This really helped me understand what is included in each of the journals and what it shows as a result. Accounts receivable can be seen in these journals, this is the amount that a particular shop or person owes a company. On a smaller scale, I understood this to be much like an IOU (I owe you) with someone you know. They might have bought you lunch because you did not have the money to buy it for yourself at the time, so they say to pay them back at the end of a certain time period. This is what I understood accounts receivable to be. They write down how much somebody owes them and will keep track of that amount until it is paid back. Sometimes that amount will never be paid back due to a shop closing.Using PeerWise to test my knowledge is helping a lot, as it is a great way to test my knowledge and allows for me to learn new things when I get something wrong. I have to admit there have been some questions on there that I have just guessed the answer because, I wasn’t sure. However, there are also many questions that I have answered correctly and known that what I was clicking was the right answer.Overall, in both 1.4 and chapter 2, I have revisited things from ACCT11059 and looked into it more deeply and now have a better understanding of why journals and ledgers are used, what is included in each and the different types of specialised journals and subsidiary ledgers.After reading the Study Guide, I then went ahead and watched the video ‘How firms account for GST’. I learnt that in the income statement, GST is not included, and it is not a part of revenue but is money a company collects for the government. It is mentioned in the Study Guide that there are different GST accounts that a company may have:GST collectedGST paidGST payments/refundsGST is generally not included in the financial statements of a company; however, the only exception is accounts receivable and accounts payable. These items include GST due to customers and other businesses owe the company revenue and GST, or the company owes suppliers expenses and thus, GST as well.After reading about GST in the Study Guide and watching this video has helped me gain a better understanding about GST and what is inclusive and exclusive of GST in the financial statements of a company.Step 3: Company Background and Annual ReportThe company given to me for this assignment is Informa. This is a ‘leading international events, intelligence and scholarly research group’. Informa serves businesses, professionals and academics working in specialist communities all over the world, by helping them connect, learn and do business, and by providing access to content, intelligence and networks that enable them to work smarter and make better decisions rma has its head office in London and has offices in 43 countries and about 11,000 employeesAs Stephen Carter, the CEO of Informa says in a video, “it is one of the companies that you have never heard about but the more you find out about it the more you like it”.The company was formed in 1998 and through growth and acquisition, has become a leading international events, intelligence and scholarly research groupIn the Annual Report, it has some information about the five operating divisions that Informa trades through. Academic publishing: Taylor and FrancisServing scholarly researchers and universities and institutions with good quality books and journals in physical and digital rma intelligenceServing businesses in specialist markets that included Pharma, Finance and Maritime and giving them digital insight, intelligence and data products, as well as consulting and marketing servicesGlobal exhibitionsServing businesses in a variety of specialist markets by giving them large-scale branded exhibitions and lead generation platformsKnowledge and networkingServing businesses in specialist marketing such as Finance, Life Science and Technology and delivering content-driven events, training and online platformsGlobal supportServing Informa’s commercial teams by giving them shared business services and function-specific expertiseTheir aim is to generate consistent sustainable value for shareholders and maintain positive, long-term relationships with customers, suppliers and their communities.It goes into more detail on the five divisions and how each division operates. After this, it then speaks on risks and the risks that the business takes to try and succeed or better manage their business. The annual report then comes to the financial statements and also a five-year summary. In this five-year summary, it includes Revenue, profits, assets and liabilities and both dividends and earnings per share. It allows for those interested in the business to see how well the business has been going and thus predict how well they will perform in the future years.I am neither happy nor unhappy with the company I have been given. At first glance I am not too sure what my company does entirely, but I know that I will be learning more as I look at this company more. After looking at the annual report, I have not learnt that much more as I just skimmed over it to try find interesting aspects like the five divisions and the five-year summary. I have found this company harder to understand in comparison to the company I research for ACCT11059 which was ‘Vocus Group’ a telecommunications company. this annual report was also slightly different to the Vocus Groups one. Some of the highlights that were listed in the beginning of Informa’s annual report include:Revenue (2018) rose to ?2369.5m in comparison to 2014 being ?1137mFree cash flow (?m) was ?237.2m for 2014 and rose to ?503.2mDividends per share (p) in 2014 was 17.80p and grew to 21.90In 2018 there was 4 million scholarly research articles available for people to download120,000 eBooks to find and downloadOver 5.5 million people attend their events and exhibitions annuallyAs of right now, I have no specific questions nor am I confused on anything specifics yet. I didn’t pick up on anything in particular that I did not understand or find particularly interesting in my company’s annual report, but I am sure I will stumble across something that I won’t understand in the future.Step 4: Creating my own chart of accounts and income statement and KCQsChart of accounts for the month of October:Date Amount ($) Transaction DetailsCategory in my chart of accounts01-Oct-19 $ (7.00)South.Point Tuggeranong2-1-1 Expenses - Car - Pay Parking02-Oct-19 $ (35.00)Optus Billing2-2 Expenses - Mobile02-Oct-19 $ (3.00)South.Point Tuggeranong2-1-1 Expenses - Car - Pay Parking02-Oct-19 $ (5.00)Square - Canberra National Turner SDA Church2-3 Expenses - Donations/Youth Group02-Oct-19 $ (7.00)Westfield Woden2-1-1 Expenses - Car - Pay Parking02-Oct-19 $ (10.90)LeWrap Tuggeranong2-4 Expenses - Food03-Oct-19 $ (49.17)Caltex Woolworths Canberra Airport2-1-2 Expenses - Car - Fuel03-Oct-19 $ (5.00)Square - Canberra National Turner SDA Church2-3 Expenses - Donations/Youth Group03-Oct-19 $ (450.00)Transfer to Mum for Car2-1-3 Expenses - Car - Registration04-Oct-19 $ (7.00)Westfield Westfield Belconnen2-1-1 Expenses - Car - Pay Parking04-Oct-19 $ (52.79)Dusk Westfield Belconnen2-5 Expenses - Gifts06-Oct-19 $ (10.00)Square - Floriade2-4 Expenses - Food06-Oct-19 $ (18.00)BlocHaus Bouldering2-6 Expenses - Leisure Activities09-Oct-19 $ (0.38)Ebay2-7 Expenses - University09-Oct-19 $ 340.53 Pay/Salary from Dusk1-1 Income - Salary and Wages10-Oct-19 $ (1.00)McDonalds Belconnen2-4 Expenses - Food10-Oct-19 $ (6.95)Subway Westfield Belconnen2-4 Expenses - Food10-Oct-19 $ (7.00)Westfield Westfield Belconnen2-1-1 Expenses - Car - Pay Parking11-Oct-19 $ (51.43)Caltex Woolworths Conder2-1-2 Expenses - Car - Fuel12-Oct-19 $ (1.49)Apple iTunes2-8 Expenses - Subscriptions13-Oct-19 $ (7.00)Westfield Westfield Belconnen2-1-1 Expenses - Car - Pay Parking14-Oct-19 $ (254.75)Booktopia2-7 Expenses - University17-Oct-19 $ (3.50)Visa Debit Purchase The Campus Bakery Acton2-4 Expenses - Food20-Oct-19 $ (5.40)Brewbar Café2-4 Expenses - Food20-Oct-19 $ (4.50)McDonalds Tuggeranong2-4 Expenses - Food21-Oct-19 $ (55.00)Payment to Youth Leader for Camp2-6 Expenses - Leisure Activities21-Oct-19 $ (4.00)Kmart South Point Tuggeranong2-5 Expenses - Gifts21-Oct-19 $ (10.00)Officeworks Greenway2-7 Expenses - University23-Oct-19 $ 249.07 Pay/Salary from Dusk1-1 Income - Salary and Wages24-Oct-19 $ (5.00)South.Point Tuggeranong2-1-1 Expenses - Car - Pay Parking24-Oct-19 $ (6.00)7-Eleven Wanniassa2-5 Expenses - Gifts27-Oct-19 $ (7.00)Westfield Westfield Belconnen2-1-1 Expenses - Car - Pay Parking27-Oct-19 $ (72.78)Dusk Westfield Belconnen2-5 Expenses - Gifts29-Oct-19 $ (23.00)7-Eleven Wanniassa2-4 Expenses - Food29-Oct-19 $ (3.00)South.Point Tuggeranong2-1-1 Expenses - Car - Pay Parking29-Oct-19 $ (6.00)Gloria Jeans Coffee South Point Tuggeranong2-4 Expenses - Food30-Oct-19 $ (7.00)Westfield Westfield Belconnen2-1-1 Expenses - Car - Pay Parking31-Oct-19 $ 0.01 Credit Interest Paid1-2 Income - Interest Earned31-Oct-19 $ (35.00)Optus Billing2-2 Expenses - MobileIncome statement for the month of October:Kayla WalkomIncome StatementFor Month ending 31 October 2019INCOMEAMOUNT ($)1-1 Income - Salary and Wages $ 589.60 1-2 Income - Interest Earned $ 0.01 TOTAL INCOME $ 589.61 EXPENSES?2-1 Expenses - Car $ (610.60)2-2 Expenses - Mobile $ (70.00)2-3 Expenses - Donations/Youth Group $ (10.00)2-4 Expenses - Food $ (71.25)2-5 Expenses - Gifts $ (135.57)2-6 Expenses - Leisure Activities $ (73.00)2-7 Expenses - University $ (265.13)2-8 Expenses - Subscriptions $ (1.49)TOTAL EXPENSES $ (1,237.04)??PROFIT/LOSS FOR THE PERIOD $ (647.43)KCQs and questions answered:When I was completing this step, I realised how much money I spent in the month of October. I spent a decent portion on food which I did not necessarily need to as it was just me going out, meeting with a friend and getting a coffee or a bite to eat. What really made a dent in my bank account and the majority of my spending’s, was due to car expenses. This is because in the month of October I had to renew my cars registration which was a larger sum of money. Alongside this was paying for fuel every week or two and then also paying for parking at shopping centres. I work at the Belconnen shopping centre and as staff we pay a $7 flat rate regardless of how long we are in the staff carpark. So, whenever I work there, I have to pay that amount. This is the same for when I work at the other shopping centres in Canberra (I get called by the other stores of the company if they need a person to fill in).I work as a Casual and so I work whenever I am needed and can be called in to work to fill in for the other employees. My income showed that I worked a reasonable time within the month of October as October was a busy month with exams and assignments being due before the end of the Semester, and also a youth event that my Church put on early on in the month. My income is usually about the same across each month as October showed and I found it interesting to see where the money was going once it went into my bank account. October was a big spending month for me and usually I don’t spend so much, however because lots of family and friends have birthdays around this time, I was buying them presents and also getting ready for Christmas and buying Christmas presents in advanced. Alongside this was buying textbooks for this Semester and a few other bits and pieces such as a year calendar that I could put on my wall and see all the upcoming assessments, exams and events. I have found having this has helped in the past so I bought one of those. In October, I also had to pay $55 to our Youth Leader for a camp that we went on just this last weekend (29th November – 1st December) and that had to be paid prior to the event so that they knew who was coming as a definite. Another item that came under the leisure activities was BlocHaus. This is a bouldering place in Canberra that I went to with some friends to get out of the house and doing something. We found it fun and we are making it a regular outing that we plan to do every so often.Overall for October, it was a reasonably expensive month, however I am looking at it with the understanding that the expenses that took place were necessity and were bound to be spent at one stage in the next couple of months, and it just happened to all take place in the month of October which is fine.So far, my Chart of accounts looks similar to the example in the assessment sheet just more detailed in terms of the category and more transactions have been included. I have given a reasonable amount of detail in terms of the categories of the chart of accounts. For example, 2-1 car expenses have got 2-1-1 pay parking, 2-1-2 fuel, and 2-1-3 registration. This could have been done for food to separate the different cafes and takeaway places that were visited; however, I did not see the point in doing so for this activity. If I was buying weekly groceries for myself (which I don’t have to) I would have made that a sub-category and then had eating out as another sub-category. Adding more detail to the chart of accounts can just allow for the viewer (myself in this case) to really see how much money is going where and potentially even allow for myself to see where I should try to stop spending my money. I am trying to save my money so that in the future I am able to spend my money on things such as a house and general living expenses so that I can live comfortably, and doing this step of the assignment, it has shown me what I spend my money on and this is showing me what I should try to stop spending my money on (FOOD!) and try to save my money for the future.The income statement makes it easier to see how much money I am spending in each category and makes it easier to understand where I am spending my money compared to the chart of accounts and each individual transaction. ................
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